The Real Reason Wood Is So Expensive Right Now
If you've recently decided to add on to your home, renovate, or build a new one, you might have experienced some sticker shock when pricing lumber and other wood products in recent months. The cost of lumber has skyrocketed, leaving many building projects on hold.
You can blame at least part of the price increase on the COVID-19 pandemic. During the beginning of the pandemic, building and construction dropped significantly, leaving sawmills with an excess of lumber and other wood materials. As builders attempted to get back to construction, the resulting situation meant a low inventory and a high demand, which almost always causes prices to rise. Consequently, lumber prices had jumped as much as 60% at the beginning of the year (via Marketwatch).
However, that's not the only reason behind soaring costs. In May, the U.S. Commerce Department suggested raising taxes on Canadian wood, which makes up about 25% of the American market, to more than double. While the results of these taxes have yet to be seen, they could spell trouble for anyone who is looking to have a house built (via Business Insider).
There's good news ahead
While the steep cost of wood and lumber is bad news for those who are looking to build or complete a home project, there is some good news for the future. Last week, the economy showed signs that things are about to change, as prices are beginning to drop. This is mainly due to sawmills increasing production now that things appear to be returning to normal after the pandemic. In addition, people who were working from home are returning to the workplace, meaning there may even be less of a demand for supplies on renovation and remodeling projects, Fastmarkets analyst Dustin Jalbert told NPR.
Knowing that prices could begin to go down may be good news, but it might take several weeks for consumers to see relief on price tags, Jalbert said. He cautioned that while the country returns to normal, prices of wood and lumber might not. "People should know that prices are probably not going to fall to the levels that they were before the pandemic," he said. Furthermore, Kyle Little, Chief Operating Officer at Sherwood Lumber suggested that people put off projects until they see prices drop. "The jobs that you have coming up, don't expect us to go back to what we saw the previous 10 years. That being said, if you can wait, there's no reason not to," he told CNBC.